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The applicable law is as below:
How are cash payments and offsets applied to my overpayment?
(1) If the department has assessed more than one overpayment against you, we will first apply payments against any overpayment involving fraud. If there are multiple overpayments involving fraud, we will apply payments in order beginning with the oldest benefit year. If none of the overpayments involve fraud, we will apply payments in order beginning with the oldest benefit year.
(2) Within the priority established in subsection (1) of this section, the department will apply cash payments to the outstanding balance in the following order:
(a) Court costs.
(c) Penalties based on fraud.
(d) Overpaid benefits.
(e) Surcharge assessed under RCW 40.14.027.
(3) The department will only apply offsets to the overpaid benefits. Court costs, fraud penalties, interest, and surcharges cannot be offset; they must be repaid.
So, what they appear to be implying is that there was fraud on your part to keep the overpayments. If you want to challenge this you will need to sue them in court for an order that says there was no fraud on your part. You can do that by filing a declaratory judgment action. See here.