This can be done in local multiplayer
When choosing your game mode, before selecting it with A, press over on the D-Pad to make it two player. Any track, any number of laps, it doesn't matter. Just set the number of AI to zero.
You may have to try more than once before it makes player one the "Cop" but once it does you're all set. As Player 1, drive forward as normal. After you get far enough ahead turn around and start driving backward. You'll have to be pretty fast about it because the timer will run out and player two will lose. Just make sure you have your car lined up and hit the other car head-on and it should be enough to convert them into a robber. It may help if you run the player two car into the wall for a little bit to lower its Health First. This will probably help you line up your crash easier too cuz you can just ride the wall.