I went through a similar experience. In hindsight the red flags were extremely obvious but I was also in extreme denial. I really wanted it to be true and was not willing to face whatever I would be able to dig up. So I didn't try. Paychecks were bouncing and I was still clasping onto the sliver of hope in order to not lose the job.

I was (am still am) a new grad with no experience but I had co-workers with families and responsibilities. We all wanted it to be true too badly and willfully ignored the warning signs.