The BBC did this a while ago, after which it can officially be considered the Russian language's mythmaker-in-chief. They took a colourless and generic Russian term for camouflage, маскировка, and simply made up some clandestine cultural significance around it. Failing to even translate the word correctly in the process (it does not mean "a little masquerade", just "masking").
I certainly can't think of any expression that would match the description. "Cow shit" being a gender flip away from an English, and very specifically English, expression for lying, are you even sure Russian was the language in question? But then again, I won't be surprised if the Beeb have let their linguistic imagination run wild again. Now I'm curious to know the details myself, but nothing turns up on the BBC4 website.
I realise "never heard of it, don't trust the BBC" isn't much of an answer, but I'm fairly confident I'm not missing any Russian idiomatics here, and if you provide more details I might at least be able to clear up what they got wrong this time.
EDIT: Tsumiman's вешать лапшу на уши is a good candidate, and the phonetic similarity to "cow shit" is an interesting theory I didn't think of. Perhaps I should've given the BBC greater benefit of the doubt despite their prior record. That said, the expression (literally "hanging noodles on one's ears") does not necessarily imply a situation where "both sides know they are lying". The speaker does know, but they don't have to be the person being lied to.