This is a little different than the Schoenflies problem.
You can rephrase your question to be about the space of embeddings
$$D^{n-1} \to S^1 \times D^{n-1}$$
that agree with the standard embedding $\{1\} \times D^{n-1} \to S^1 \times D^{n-1}$ on the boundary.
i.e. for your embedding drill out a neighbourhood of the boundary, and you get (essentially) one of these.
The Schoenflies problem asks if when you lift an embedding
$$D^{n-1} \to S^1 \times D^{n-1}$$
to the universal cover
$$D^{n-1} \to \mathbb R \times D^{n-1}$$
then is it isotopic to an embedding with image $\{0\} \times D^{n-1}$, i.e. the linear embedding.
What we know is the answer to your question is yes in dimensions $2$ (*) and $3$ but false for $n=4$ and $n \geq 6$. The $n=4$ case was first proven by David Gabai and myself. Tadayuki Watanabe has come up with an argument for the $n=4$ case, as well. The $n \geq 6$ case was done much earlier by Hatcher and Wagoner. The $n=5$ case is likely false as well, and it should be the topic of a paper to be put on the arXiv soon.
(*) Technically to make my setup equivalent to yours, in the $n=2$ case you need to demand the embedding $D^1 \to S^1 \times D^1$ does not link/wind around the $S^1$-factor.