Derek Atlas is on parole. That's provisional release. If Derek Atlas is caught breaking the law or violating other conditions of his parole, he goes back to jail in Nevada to serve his full sentence and possibly additional charges.
He's in New York because Nevada requires parolees to have legit housing and employment. That's hard for someone with two felonies. So Derek was paroled to another state based on family-based employment and housing there. Derek's family did the same thing for him after his first felony parole.
On parole Derek can be visited at home or work by unannounced parole officers, his phone can be searched without a warrant, he can be subjected to random drug testing and interviews. He can have a curfew. He can't travel out of his parole jurisdiction without permission.