Story highlights A human rights advocate says San Antonio prisoners have access to weapons and drugs

Prisoners were recently allowed to open a 600-person night club, Carlos Nieto Palma alleges

But a Venezuelan government spokesman says claims of the prison discotheque are "a lie"

A prisoners' rights group says jails are overcrowded and that violence is common

It is a surprising scene -- a picnic-like atmosphere with children playing in the pool under the tropical sun. The adults are also in celebration mode. The crowd is listening to a couple of rappers and some people dance to the beat.

But this is not a park or a recreational facility. It's not somebody's backyard either. This is pavilion 1234 at one of the largest correctional facilities in Venezuela: San Antonio Prison.

The prison is located on Venezuela's Margarita Island, also home to a popular beach resort that attracts international tourists.

Carlos Nieto Palma, a Venezuelan human rights advocate, says San Antonio, located in Nueva Esparta state, has become a recreational facility where you can find anything from weapons to drugs and alcohol. Inmates allegedly even have access to cockfighting rings and prostitutes, but that's not the most shocking part.

Nieto Palma, who's also the general coordinator of A Window to Freedom, a prison watchdog group, says the inmates recently had a grand opening for a discotheque with capacity for 600 people. He learned about the night club after getting an invitation by email and confirming the news with prisoners.

JUST WATCHED Video captures alleged prison abuse Replay More Videos ... MUST WATCH Video captures alleged prison abuse 03:06

"This invitation talked about a discotheque with stage lights and LED screens. It also talked about a party lasting until sunrise where there would be 'bad girls,' with 'toys' to play with them. You can then assume that they also had drugs, alcohol, and other things," Nieto Palma said.

This is not the first time conditions at the San Antonio prison have raised eyebrows. A New York Times report in 2011 called the prison "a Hugh Heffner-inspired fleshpot."

Nieto Palma, who has been at San Antonio several times, says the prison is actually run by Teófilo Rodríguez, a convicted drug trafficker known as "El Conejo" or "The Rabbit." Nothing happens at San Antonio without the approval of The Rabbit or his gang, he says.

"The state hasn't been able to do anything against them in spite of the multiple statements made by the minister of prisons vowing to end the power of the mafias," Nieto Palma said.

CNN tried for weeks to get a response to the allegations from the Venezuelan Ministry of Prisons. In a phone call, ministry spokesman Francisco Solórzano dismissed the discotheque claim.

"That's a lie. Someone came up with that lie because they were trafficking drugs inside the prison and we ruined their business. We do not respond to lies," Solórzano said, before abruptly ending the call.

The possible existence of a discotheque inside a Venezuela prison is just the latest example of a prison system that human rights groups including A Window to Freedom, the Venezuelan Observatory of Prisons and Human Rights Watch say is in a state of crisis. They say in the best cases, prisoners control their own affairs to preserve a fragile peace, while the worst involve constant riots and a climate of violence and murder.

According to the Venezuelan Observatory of Prisons, a prisoner rights organization, there are 45,500 inmates in 33 Venezuelan prisons that were built for 17,500. This means the overcrowding rate in the country's prison system is 176%.

Marianela Sánchez, an attorney with the group, says the observatory estimates that about 5,300 inmates have died inside prison walls since 1999 and more than 15,000 have been injured. Many of the fatalities and injuries have been the result of prison uprisings.

In January, 56 prisoners and one member of the Venezuelan National Guard were killed during riots at Uribana prison in Lara state, according to a report by Human Rights Watch . Forty-six other prisoners suffered serious injuries.

During a weekend riot in June 2011, 19 people died at El Rodeo I Prison near Caracas, the Venezuelan capital, as reported by the Venezuelan Interior Ministry.

"This government has been an accomplice by omission. We have a population of more than 20,000 inmates who have been the victims of violence in jails. Some have lost their lives others have been injured. The state does not have the ability and has not demonstrated in practice that it can protect the life of prisoners," Sanchez said.

Last December, Minister Iris Varela issued a statement after launching an investigation into the savage beating of inmates at a federal prison in Falcon state. The investigation was launched after a video showed prisoners forced to strip completely naked and hit in the buttocks, one by one, with what appeared to be a baseball bat.

"We strongly repudiate those actions against the inmates. It's abominable. If there's a government that has respected the human rights of prisoners, that is the revolutionary government led by [then] President Chavez," the statement said.

But Nieto Palma, the prisoner rights activist, says the government has done little to improve the situation and suggests the minister knows what happens inside prisons like San Antonio, on Margarita Island. He showed CNN a picture of Varela posing with The Rabbit to make a point: gangsters have plenty of clout.

What makes San Antonio different is a lower homicide rate. In other facilities, where overcrowding can be at dangerous levels, violence is common. Last year alone, nearly 600 people died inside Venezuelan prisons, according to Human Rights Watch.

But at San Antonio, hard-core criminals seem to be content for the most part. Their perks include free access to entertainment and women and a pool awaits those ready for a splash under Venezuela's tropical sun.