How about for a Lucha guy, preferably an American guy of Mexican descent, have him be a reformed cholo, a former Vatos Locos style gangster who has changed his ways. I think it could actually be pretty good if the guy is good enough to pull it off. Seeing as how wrestling is aimed more at kids these days, you could have him pushing an anti-gang message and believing in yourself type deal. He had a hard time getting a job because of his criminal record, training for wrestling kept him off the streets and out of trouble, he's trying to inspire at-risk youth to stay away from the gang life, things like this could all be parts of his character.
They could do a lot of stuff with it too. Heels could bring up things he did before, trot out previous victims of his crimes or his former homies to show that he's full of crap and he was the worst one in his whole crew, but his whole gimmick is that people can change and be redeemed and he prevails in the end. Also you could introduce guys for him to feud with by have them being former homies trying to drag him back into the gang life, or former enemies from rival sets. And of course when it gets stale and it's time to turn heel it would just be a matter of him reverting back to his criminal nature. I haven't watched much wrestling in the last 10 years so apologies if something like this has been done already.