Wow, 1.2 million in medical bills from an auto accident. You must have had numerous surgeries, rehab etc for a long time to accrue that much debt. About 50% of all bankruptcies filed in the US is due to medical bill debt, (not auto accident created), but many times due to serious illness. Did you explain to them of the accident, since this would be expected?
This sounds like a new "start up" company, if as you say that the VP and Owner do not have 7 years experience combined.
But, the thing that does not make sense, is that you did not fill out an application and/or forms? For the title or position of Director of Sales, and only ask for 3 references, would be stupid if they only did that.
Today, even in entry level jobs, most companies will have all applicants take a drug test and do a background check to verify employment, education, credit, criminal, etc. Most jobs are ALWAYS contingent on the check coming back clean, otherwise the offer is retracted.
For the type of job you are applying for, it would be logical to do a more thorough check vs an entry level job and expected.
Suggest you talk to an employment lawyer for legal advice.