Badges can be found by breaking apart the Jail Outfit level 5 item:

1. Get a Top Secret Suitcase level 8 item, by tapping the Cell Phone to produce Clues.
2. Spawn Clothes from the Suitcase and create a level 5 Jail Outfit item.
3. Tap the outfit 6 times to rip it apart. On the last tap, a random Badge will be created.