Well first of all this achievement doesn't work local. You have to do it online.
You need at least 2 friends to do this achievement. The best case would be that you and one friend has 4 pads and the other friend has 2 pads.
So in main menu press start on all pads and press the guide button on one controller and sign in as guest.
Make this also with the other 2 pads.
now go to private race - xbox live and then invite your friends who have made the same thing with their pads.
now start the race and race till the last lap and than make sure your 4 pads are in 1st, 2nd, 3rd and 4th place.
You needn't finish the race with the other 3 pads. They can be DNF.
You can also unlock with this method the
just go to matchmaking instead of private race in the main menu and search for a race and when you are alone in a lobby with 4 pads invite your friends.
UPDATE: (26.04.2019)
now you can do it local
Thanks to
BurningFox for the wayback machine link:
https://web.archive.org/web/20160102015034/http://forums.seg...