Ted, I think you need a lawyer, and you need one right now.If the email is right, that you paid for a permit for use in your own business, while you were "on the clock" for your former employer, you can be sued.  It's quite possible that you'll have to give back that last week's pay, and perhaps more, to take care of this.  You need an attorney to know just how hard you could get hit at trial, if it comes to that, who can negotiate the best possible deal for you.