This happens a lot in the Alcor RESs, every faction in Alcor seem to try to be both police and pirate and all put bounties on each other. I'm allied with every faction there so they show up green, but police from one faction will shoot up police from an other faction.
Gets confusing sometimes when there's pirates (who detect my bait gold cargo) and police of the same faction at the same place, every once in a while the "police" then join in with the pirates attacking me.
It's a great system for bounty hunting otherwise since shooting down 1 ship results in 6-7 bounties (4 factions, fed, empire, alliance), just very chaotic at times.