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I was able to claim job seekers allowance for many months before they looked into the reasons behind my employment and stopped my benefits
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So, in other words you never disclosed at the time of making your claim why you left your last job?
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and running low on money I stopped pursuing my case.
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Far as I know it costs nothing to lodge an appeal.
You see, the problem you are really facing here is because you appear not to have told them at the JC when you applied why you left your last job.
Because, in which case, the DWP is doing everything correctly. As you failed to disclose critical information - it is on a JSA application form, been on them for yonks whether on the old or new system - I think it may be difficult arguing with them on these grounds. That's just my opinion, however. Not to be taken as red. But ... your situation is pretty unusual but not uncommon I'd imagine.