Guns are illegal in NY? I think not, in the sense of a law that could withstand challenge.
Handguns have to be transferred across state lines to a FFL in the state where the transferee resides.
The way straw purchases work for handguns is mostly that a family member who can legally purchase the firearm does.
But if you are talking cross state border sales, which are not the majority even though it’s an oft quoted trope, a resident of Indiana buys a lot of guns, then sells them illegally in Illinois. Precisely because you can’t easily buy a handgun in a state you don’t reside in.