fired because of record???

I was fired from a banking job in the state of wisconsin. My employee contacted me two months ago, and informed me that my crimal background check showed I had an 1988 arrest for retail theft in the state of Illinois. By this time I had been working for the bank for five months. I told them I was not aware of it. And I truly don't recall it even now.

They terminated me that day, but called me back a few hours later and said they would keep me on for 60 more days to give me a chance to settle the case. The next two months were rough. I was constantly called at home or pulled into the office at work being quetioned about the matter.

I could not afford a laywer and I have four small children with no one to leave them with while I travel to Illinois.

After my two months was up no one would tell me if they were going to keep me or not. They even took away my health insurance. I was asked twice to resign, but I refused.
Finally 3weeks later they called and fired me, but now they are saying I am fired because I lied on my job application. I am truly upset by this, because when this whole matter started they told me they knew I probally didn't remember, or didn't know about this old case.

can they do this to me?
Will I still be able to claim unemployment insurance?

Presuming that you were an at-will employee they sure can fire you. They don't need a reason to fire you when you are an at-will employee. You probably won't be able to collect unemployment compensation due to the stated reason for your termination (lying on the job application). That means you will have to file for unemployment compensation and then wait for their denial. Once they deny your claim you carefully follow their published ways to appeal that decision. Then if you prevail on appeal you get unemployment compensation.

I'll keep my fingers crossed!!
Hopefully they won't consider it lying.
I sure don't!!

Thanks for responding