From the Super Mario Wiki, the Mario encyclopedia
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Crime Land is a large city on Mushroom World, which is seemingly based upon a 1920's Chicago. The city is highly-prone to all sorts of crime, hence its name. Al Koopone, the worst gangster to ever grace the streets of Crime Land, was the largest threat to the city during his reign. Mario's Pasta Palace, formerly known as the Koopa Klub, as well as a branch of the First Mushroom Bank and the Gangster Supply Store are located there. Princess Toadstool even wonders why does this place is called Crime Land while arriving there. Crime Land was only ever seen during the events of The Super Mario Bros. Super Show! episode "The Unzappables", which was situated there.
In his never-ending quest to commit more crimes, King Koopa had traveled to Mushroom World's most notoriously crime-ridden city, Crime Land. Taking on the alter ego of Al Koopone and setting up his headquarters at a soda bar known as the Koopa Klub, King Koopa and his Koopa Pack soon triggered a massive crime wave, which prompted Mario and his friends to travel to Crime Land and stop them.
After nearly being shot to death by the Snifits of Mouser, Koopa Troopa and Tryclyde, Mario and his friends hatched a plan to stop Al Koopone at his next heist. After enlisting the help of a nearby Stool Pigeon, Mario's group intercepted the Koopas while they attempted to rob the First Mushroom Bank, but were unable to stop them due to the Unzappable Hats they were wearing.
Al Koopone eventually tied up Mario's group and forced them into wearing cement shoes before dumping them in one of Crime Land's rivers. Fortunately, Mario was able find a Starman, which he was able to use to free himself and his friends from drowning.
Dressing up as gangsters, Mario and his friends infiltrated the Koopa Klub and stole the Unzappable Hats from the coat check room, which they used to stand up against the Koopa Pack. The Koopa Pack was quickly defeated, prompting Al Koopone to flee from Crime Land via a Warp Zone. With Al Koopone gone from Crime Land, the city's massive crime wave dwindled down and Mario renamed the Koopa Klub to Mario's Pasta Palace as Crime Land does not have an Italian Restaurant.