How do I deal with hurtful gossip about me?

This guy and I were pretty good friends in middle school and we went our separate ways in high school. He used to like me and he asked me out, but I rejected him politely. I remember clearly how he was trying to force me to be his girlfriend, but I consistently denied. We were friends at the beginning of freshman year, but he started acting strange and began to disrespect me. Now we're both juniors, and I learn today from my close friends that his mother has been recently spreading rumors about me about how I had a crush on him and literally went insane for this guy (completely untrue). I had no idea how an adult can make such a ridiculous story about me, since his son has a lot more issues than I do and has not excelled in high school as much as I did (hes been barely ping every subject and has bad company). At first I found these fresh new rumors funny, but I know they're downright hurtful. I want to wait and try not to worry about it since its a phase and it will slide, but if someone such as his mother (who is like the head of all organizations and crap) is going to stew stories about me, I'm afraid the gossip is going to get worse. My family is not even close to this lady, so I don't know how to confront her. I'm too scared to talk about this matter to my mother since she overreacts to everything and she might point ou every flaw as to why people don't like me. I want to not care and I try to change this matter into something funny or pointless, but I'm afraid its not working. Help me?