I cashed out an old 401K from a previous employer, had the taxes taken out and just received a letter stating that they gave me the matched funds erro

the funds in your 401 [k] belong to you. these ae pre-tax monies. you can take these monies for your own use but you must pay the required taxes and a possible penalty depending upon yoir age.  you are stating that the employer sent you [in error] the matching funds. i am not sure what you mean. if the employer matched your contributions up to a certain percentage, the funds are yours. i need more details. if the money were wrongfully sent you by the employer, you need to give the employer immediate written notice of their error.  please explain that the funds [which you believed were your funds] were spent on 'sandy' repairs.  ed dimon, esq.