So, I asked what you would do in the case of a set of Pants on Fire. Thank you for the suggestions and ideas. Here is what went down:
I put Phone-Borrower in a room away from everyone for awhile (if I say how long it will sound mean). I tried dialing the phone to see if she was silly enough to leave it on--no luck. I went back in and again explained the facts of the situation. Everything pointed to the obvious answer that she was not telling the truth. I never quite said "you are lying" because accusations seem to shut them down more quickly than anything else. I said that I wanted to believe her, but that the facts were not supporting her. I said she could clear her name if she would let us call her grandparents and they could bring the phone (since she was saying it was at home). This is where she started to lose ground. She didn't want us to call. She wanted to bring it the next day. I hounded her with the idea of clearing her name by making sure we had it back. She finally broke down and said someone else was holding it for her but she didn't want them to get in trouble. Eventually, we got the name of that person and we got the phone back.
THEN I told her that she lied. I said it very clearly and showed my disappointment. I told her that the next step was to lose the attitude, stop trying to back her way out of the lie, and own up to the people that mattered. I told her that I expected her to talk to her mom that evening and own up to what she did. I made sure she knew that even in her lie other students backed her up, and she owed them an apology, too (since they would now be in trouble as well).
Did it work? Well... I thought it may have had an impact. But, the next day when she came to serve her In-School Suspension she was a jerk. I decided to be a hard-ass and put her in ISS again the next day. She started out with an attitude, but adjusted it slightly. At the end of the day it was discovered she had taken the iPod of a family member and given it to another student in our program. Yesterday, she was awful again. So no, it didn't "work." However, she is on a path of some kind and this is a step on that path. She is begging for boundaries and we are working with the family to make sure they are there when she pushes against them. I found out a little more about what might be going at home that is triggering this, and its bad enough that I can't share it here. She needs hugs and loves as much as she needs clear limits and consequences. We'll keep trying to give her both. Hey Mom and Dad--sound familiar?
As for Phone-Lender. We worked with him to call his mom and admit he had not "lost" the phone and that he had given it to Phone-Borrower. I asked him what the "valuable life lesson" was and he immediately said "don't lend out your phone." Well done my little Poodle-head.