All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.
There is nothing wrong with accepting what your nephew gifts you as long as his wealth is mixed of Halaal (the lawful) and Haraam (the unlawful). We have pointed out the permissibility of accepting gift from the one whose wealth is a mix of Halaal and Haraam, as explained in Fatwa 84314. Also, the prohibition of the Riba-based loan is related to the one who takes it not to the wealth itself.
However, you should explain to him the prohibition of Riba-based loans for one will be asked about wealth two questions: How did he earn it? And how did he dispose of it? Riba is one of the greatest evils and it is devoid of blessing and has no goodness. So, he has to stop that and fear Allaah The Almighty, for whoever gives up a thing for the Sake of Allaah, Allaah will compensate him with something better than it and whoever fears him, He will provide for him from where he does not expect.
Allaah Knows best.