He did admit there had been "isolated" cases of animal movements but said they had come out of "sheer frustration".
In a BBC documentary screened on Thursday, Brigadier Alex Birtwistle said there is anecdotal evidence of farmers breaking transit rules to deliberately infect their stock or to hide them from slaughter.
The National Farmers' Union has dismissed the claim and says the brigadier's comments were made a month ago at a time of extreme pressure.
Brigadier Birtwistle left the Army at the end of April after postponing his retirement to head the battle against the epidemic.
The documentary followed him throughout the huge task. During filming he told the BBC: "People are still transiting sheep illegally and there's strong anecdotal evidence to suggest that is the case.
"Either to infect them so they can claim compensation, or simply to keep sheep they haven't previously declared one step ahead of the cull process.
"And it's so bloody annoying. So bloody annoying. You know everyone's worked 20-hour days and it's devastated the whole area and people are still moving sheep without a licence.
"I mean we've killed 400,000 sheep in the cull to try and stop the disease spreading and there are other buggers taking it outside the area."
But an NFU spokesman insisted there was no evidence to back-up the allegations.
"Even the brigadier has heard only anecdotal evidence rather than seeing something with his own eyes," he said.
He did admit there had been "isolated" cases of animal movements but said they had come out of "sheer frustration".
Bill Goldsworthy, an executive adviser to the NFU in Wales, said there was "no evidence whatsoever" to justify the claims.
He suggested the reason such tales were circulating was down to frustration among certain people.
The documentary told how Brigadier Birtwistle was just days away from his retirement when he was asked to head the Army's effort in Cumbria, the country's worst-affected area.
It explains how he mapped out his battle plan "on the back of a cigarette packet" while awaiting a private meeting with the Prime Minister, Tony Blair, in the car park of a Carlisle industrial estate.