Michael Lohan -- Sued Over 'Girls Gone Loco' 'Scam'

10:16 AM PDT -- Lohan just told TMZ, "It's a lie." He says Spanish GGW was a real business venture and Reitano even met with Joe Francis. Michael also says there were no naked women involved. Has he seen the videos?

Michael Lohan used naked girls as bait to entice an investor to cough up thousands of dollars ... according to a guy who's suing Lohan for more than $1 million claiming he was had.

Richard Reitano says Lohan came to him in 2009 with a plan to dub over Girls Gone Wild videos in Espanol ... and then asked him to invest $100K.

According to the lawsuit, Lohan claimed GGW creator Joe Francis had given him the rights to the videos ... but he needed cash to get the ball rolling so Reitano loaned him $25K,

But Reitano claims it was all a scam because no videos were ever produced.