Excuse me, but are you saying you filed for benefits after being fired, about six weeks ago, and received something (a decision letter?)that started you receiving unemployment immediately? Why did you tell them you were applying? Did you tell them you were fired or laid off? How long ago has this been?
If you filed for benefits and said you were laid off due to lack of work, and they began paying you, then checked with your employer, who said, "No, in fact this employee was fired," then they would have stopped your benefits and begun an investigation at once.
But at some point during this investigation, before you were declared overpaid, someone with unemployment has surely talked to you about the reason you were fired, right? You were given a decision originally saying what?
What do you mean you have no evidence to fight them? You have what happened to you, in your own words, and this is the evidence you need to file an appeal. If you have not done this already, DO IT IMMEDIATELY. You must file the appeal within 15 days of receiving the notice of denial. If the employer did not show that they had a valid misconduct reason to fire you, and you began receiving benefits to begin with, and then you received notice that the employer had appealed, (and the claim is now denied?) then why in the heck not participate in the appeals process and present your reason why you were fired, and fight the appeal? You have nothing to lose but a small amount of your time, and there may be a chance you will NOT be overpaid?
Every employer and every claimant has the right to appeal an unemployment decision. There is then a hearing where the intial decision to grant benefits is looked at again.
This does not mean you automatically are stopped from getting benefits, it means there is a process of looking at your termination. If you were not fired for a valid misconduct reason as determined by the unemployment insurance office, NOT just by your employer, then you may be approved for benefits in spite of the employer's appeals and objections.
If your claim is first approved, and then denied, and you did not go in and lie about the reason you were terminated when you filed (telling them you were laid off due to lack of work when you were actually filed, for example) this is not considered a fraud overpayment. You can, after you have exhausted all your appeals, talk to them and request to file a waiver, in which you show that you are unable to pay the money back at present due to your financial situation. But they will not make any steps toward recouping their money until you have had your appeal if you are entitled to file one. And no they do not demand it all back in one lump sum. And no you won't be prosecuted. They don't prosecute people who made a genuine filing for benefits and were denied in a non-fraud decision.
So where are you in this whole process? After five weeks, I'm not seeing how anything could have happened except an initial decision denying benefits. And this should have a notice that you have fifteen days to file an appeal if you disagree with this decision. And of course you will want to file an appeal, unless you were terminated for a real dilly of a justifiable reason, or unless you flatly lied about your reason for termination in filing the initial claim. Did you receive a notice denial informing you of your right to appeal , or have you just now gotten a letter saying that your employer has filed an appeal against your receiving unemployment and that if the decision stands and it is determined you are ineligibile you MAY be overpaid by $535?
It sound to me as though you are sort of woefully uninformed and not really understanding the unemployment insurance process.
What does the last communication you have received say, exactly? What exactly was the reason you were terminated?