“ Airbnbs are 100% prepaid and no-showing, even with just cause, means some sort of claw-back of funds, neither quick nor fun.”
Actually, while you have pre-paid in full, AirBnB does not pass the money on to the owner until after you arrive, check in, and approve of the rental. I believe it is 24 hours later. You could have responded to that message by telling him that you declined to participate in the fraud and wanted to cancel. Also that if he did not approve your cancellation and refund immediately, you would report him to AirBnB and NYC authorities. And then you take screenshots of the messages, starting with the request to pretend you are a co-worker, before hitting the “cancel” button.
I have been able to successfully cancel AirBnBs that were non-refundable, when I had good reason (and without making any threats). I just sent a message to the owner with my reasons (in one case it was a serious back injury my husband was dealing with) and they agreed the cancellation and full refund.
This situation is of course different, but you still had good reason to cancel and I doubt they would have ignored your request under the circumstances.