That's no fun.

The loan portion of a 401k is an optional benefit employers may choose or not choose to include with their plan.

I have no idea how you can "undo" this, really. I'll be following this to see if someone else has a solution, though.

The only option would have been to pay it back in Full prior to rolling it over. At this point you rolled the remainder, and the loan was considered money you already received. -- This is common, and they most likely withheld federal tax.. besides it counting as income, unless you asked them to take extra withholding before rolling, you will most likely have to pay the early withdrawal penalty as well. 'This would have all been outlined in your distribution paperwork, you pay it back in full before rolling, or it is income. Sorry.. no way around it now.

I worked for a company for five years and invested in their 401k plan. I unfortunately went to prison for ten years after I got out the company was closed I would like to know what happen to the money that I invested in with the company .