Twila, as dumb as it may sound there are laws right here in BC about the same thing. You cannot remove soil from land in the Agricultural Land Reserve is one I know of. Now if this guy had unloaded the soil somewhere else, someone is always looking for free fill, he prolly wouldn't have gotten into trouble. What if there were contaminants in the soil he dumped, or what if there were bugs which could be harmful to the new environment (pine tree beetle), there are lots of reasons why dirt should not be transported to other areas.
I've seen signs near boat launches which instruct people to clean their boat before launching it into this body of water so that the spread of millfoil and other such things are stopped.
I guess on the surface the story sounds nutty, but it's not really.