A statement told with complete awareness that the other person knows the statement to be false. This type of lie is often told and accepted to avoid the fallout that might occur from dealing with reality.
Your friend: I heard your gf busted you at Nikki's last night.
You: Yeah, but it's not problem. She's so whipped that a simple red lie did the trick.
Your friend: Dude, she has no spine.
You: Hells yeah!
Unlike a white lie, which is made for someone else's sake; a red lie is a lie specifically made for the liar's sake.
ie- you might tell a white lie not to hurt someone else's feelings, where as you might tell a red lie to not feel bad about yourself or embarrass yourself.
It was his fault the family car had a scrape on the passenger side door. However, he pretended to have no knowledge of how it happened as to not get in trouble. He told a red lie for his own sake.