I'll second "Fortress".
The main character is sent, mistakenly, to an invisible prison.
Christopher Lamberts character was sent to prison, because him and his wife are expecting a child, which is illegal in the future due to the worlds resources running out. It wasn't a mistake him being sent there. The prison itself isn't invisible, but there are areas marked with red and yellow lines the prisoners aren't allowed to cross. The prisoners had a small bomb/torture device (called an Intestinator IIRC) shoved down their throats when they arrived which causes pain if they cross the yellow line, and blows up killing them if they cross the red line.
The prison itself, when viewed from the outside world, just showed a large, cylindrical, empty hole in the ground.
Some of the prisoners may have occasionally disappeared and converted into automaton soldiers, used to guard the prison.
I don't remember the prisoners disappearing, but the children of the pregnant women (the women are kept in the same facility) are converted into the cyborg soldiers.
Towards the end of the movie, the main character escapes the prison (possibly with the help of a spouse/girlfriend) and is confronted by the above mentioned solders. Removing the helmet of one of the solders revealed that it was a human which was transformed somehow to function as a solider (e.g. a tube came out of it's mouth - I remember it being quite disturbing at the time).
Yes, this does happen. Long story short, Christopher Lamberts wife accesses the computer to help him out of a coma (Like I said, long story) which enables Christopher to escape with a bunch of other prisoners, one of which is a computer expert who accesses the computer to infect it with a virus. It doesn't enable them to control the cyborgs, it only stops the cyborgs from working properly.
The prison is built like a mine (circular entry and not much else from the top) and the prisoners are forced to mine to enlarge the prison.