Stand near the railing next to the palm tree and perform Frank's Somersault Kick move (while standing still, Press to jump, then immediately press to get on top of the railing). While on the railing, step back one step so that Frank turns then jump to the palm tree in the distance. Frank will grab onto the side of the palm tree. One of the palm trees has three grapefruits and one of them has the sub-machine gun on top. Jump to the slim platform that the columns below are connected to in order to reach the other palm trees.
Jump from the right staircase to the blue awning above Kid's Choice Clothing. Follow the blue awning all the way around to the very end. Frank will run past a cardboard box, stuffed bear, and orange juice. The sub-machine gun will be at the very end. See Case 1-2 for more detailed instructions.