The 46-year-old actor has decided to sue the magazine for the false report and is currently plotting with his legal team to get to the bottom of the case, reported E! online.
Sheen maintained that he spent a relatively quiet evening with his ex-wife, Denise Richards, and their two daughters, 8-year-old Sam and 6-year-old Lola.
He said that on teh night of the incident, he wasn't even at the hotel with his so-called host of female escorts.