I don't know about the sex shop Santa part. You'll provably want it to be pretty close to the myth figure Santa if you want to prank them like that, IMO.

I would make him a gnome half elf and say that the city that you lived in before didn't like you because you were threatening the local economy by passing out your inventions, and they were ultimately ruining business for the engineering guild. As a human only guild, they were definitely not on a gnomish level of engineering, lost significant product interest, yet weren't interested in apprenticing under the other races, except for one half frost giant wizard who serves as your Criminal background contact. The mage's guild has a significant elf and gnome-elf population and has expressed interest in keeping you in the city. As not to start a guild economic war, you left.

You had to go farther north and you eventually find a village of gnomes who share your talent for engineering. You told the mages guild about this, and all the gnomes and elf gnomes migrated due to escalating racial tensions between gnomes and humans. Bent on destroying business for the now-rapidly developing human engineering which combines advanced alchemical principles with engineering, the gnomes take your story to heart and begin creating an automated mass production machine, using no small amount of magic.

At some point in the story the half frost giant contact appears in a particularly snowy misty step and tells you that the machine is finished and gives you a bag of holding with two openings. You can't hold anything in it other than the toys, and it's really just your gnomish racial invention with the added ability to give it to an npc and pull another one out

After being chased out of more cities for destroying their economies on both human and gnome side of engineering, and gaining a few more admirers from elf communities, you mention to the elves that they need more magic talent, especially druidic, and also you need more people that can ranch dairy cows and bake en masse, and that cookies are preferred. Your contact casts Awaken in a pine tree in the centermost part of the main city, which sits there with your bag of giving and preaches about leaving cookies and dairy products for it to examine for quality.

Around this time the other party members should be figuring out that you're Santa. When they call you on it, you have a psychological breakdown and start yelling incoherently and often using the words 'economy, inflation, guilds, and

You turn a bag of giving inside out, causing engineering mechanicals to pour out at a constant rate but with little force, and teleport across everyones' roofs and utterly flood the city streets with toys. Being half elf with fey ancestry, your skin turns green like plants when you realize what you did, and declare that the factory will be shut down until further notice. This did not impact the gnome elf village at all as they were profiting off of apprenticeships from various guilds while the factory remained fully automated.