Font color only available for Admin/Moderator
 

Is it possible to set it up so the color red is only able to be used by certain usergroups? For example, if the staff were to edit a post - and it would prevent users from 'faking' a staff edit. - and I don't want to limit, or remove the editing abilities.

Not really.. I'm sure somebody could write a plugin to disallow specific usergroup(s) to use "red" or "#FF0000", etc, but ultimately.. there's more than one hex code for red and unless you found a way to block an entire spectrum of colors, I'd say you're pretty much out of luck on this one.

If you encounter a user impersonating a member of the staff, just take care of them accordingly. That's what I'd do.