One possibility is that Luigi is just a vaguely similar looking guy who happened to be in the area at the time of the shooting. They found some DNA from a coffee cup or similar that he dumped in a trash can near the scene. So they actually do have real DNA evidence of him being in the proximity. Once they were confident they had air-tight proof that he was in the viscinity, the cops just went ahead and manufactured the rest of the evidence. So Luigi really was by chance near the scene of the crime, but it's Manhattan, plenty of people were near the scene of the crime.