123 Fake Street is the address that Marge made up when calling the police. She accidentally cut off Homer's thumb but Chief Wiggum thought it was attempted murder and asked for her address so they could come and arrest her. The address happened to exist (it was an abandoned house) because when the police arrived at the location, Milhouse and Bart were there with illegal fireworks to hide from them. When the police go bursting into the house to expect Marge, they see the boys attempting to hide the fireworks in a closet. Instead of being in trouble, the police make a deal with the boys to go undercover.