@Stavros69 This sounds like a very unethical host, and I'm sorry this happened to you. However, you're best option was to call AirBnB when the host confronted you with this situation. I know it's not ideal, but any time you pay money off-platform, you can consider that money gone.
Had you reported the host, AirBnB would have tried to find you other housing. A host is not allowed to do this, unless it's for something clearly explained in the listing, like a tourist registration fee, electric charges, or similar.
Unfortunately, the host is the only one who can return your money, and it sounds like she's not going to do that. Reporting the host is your only option at this point.