Buying Owner Occupant HUD homes as a Investor/Flipper

Hello, I came across something concerning. I've done some research and noticed a rehabber buying homes on HUD as a owner occupant but then a couple months later, flipping it to a end buyer. I'm not a tattle tale, but why can't people play by the rules? It seems like this business pushes people to the limits morally because of money and/or greed. I understand, but why? I'm not going to say anything to this guy or anyone else, but people shouldn't be doing this. On a side note, sometimes REO agents bring me deals before they hit the MLS, and I have a feeling it may not be morally right, so should I still buy them? Tough decisions..