A term to describe a situation where a person or group knows someone or another group knows they do something but pretend they don't and if it comes up everyone denies it.
Person A: "Yeah by parents know I drink, and they know I know they know, but we all pretend we I don't."
Person B: "Mutual Denial"
Person A: "yeah, 'Mutual Denial'"
I know you know I do it but we are going to pretend we don't and if it comes up we deny it.