From Prison Break Wikia here is the transcript of Season 1 Episode 6 titled Riots, Drill and the Devil.
BELLICK: [Approaching T-Bag and speaking more quietly] That's right, Teddy. I read your psych records. About how your daddy raped his mongoloid sister and then nine months later, little Teddy pops out.
[T-Bag is quiet for a moment, suddenly he grabs the gate]
T-BAG: I'm gonna kill you!
[T-Bag goes crazy, the rest of the rioters start yelling and attacking the gate again, Bellick laughs, then bends down and picks something up]
It's evident that T-Bag's father was a pervert and incest. So Yea. He sexually abused T-Bag.