Even though Ormil tells you that "The authorities of the Imperial City took her off the ship as soon as we docked", "I feel much better now knowing she's locked up" and "She was a ruthless woman, and I'm glad she's behind bars where she belongs", she is nowhere to be found in the Imperial City Prison.
Oblivion Remastered Oblivion Remastered addresses this issue. Her aggression is also lowered from 15 to 5, she's removed from her faction, and her disposition with the player is lowered by 100.
The Unofficial Patch already places her in the IC Bastion prison. But the other changes could be forwarded.