A Mooroopna resident, who has asked not to be named due to fear of reprisal, said he first became suspicious of the activity after hearing machinery one afternoon.
"I was watching a movie when I heard some chainsaws out in the forest," he said.
"It went on for weeks and weeks and we didn't know what was happening down there so we went and had a look."
According to the resident, hundreds of red gum tree stumps, branches and debris now litter the forest floor of Gemmill Swamp Wildlife Reserve and state forest along the Goulburn River.
Another Mooroopna man, who also insisted on keeping his identity private, confirmed hearing late-night chainsaw noises and seeing campers working on the trees in the area.
"I walk my dog and ride my bike out there and you can see all the stumps," he said.
"Over the last 15 years my family and I have watched a colony of squirrel gliders grow in size.
"These squirrel gliders use these dead red gums as homes, and to breed in and raise their young.
"As we are coming into their breeding season, I am concerned that the illegal removal of these trees will impact these creatures in a disastrous way."
Both men shared their concerns in regard to the wood being allegedly sold online through Facebook Marketplace, Gumtree, and Buy, Swap and Sell groups at a lower than average retail price.
A Parks Victoria spokesperson said the organisation was aware of the illegal activity taking place and there were measures in place to find those involved.
"Significant hollow trees have been cut down and removed from Gemmill Swamp and other reserves and national parks across northern Victoria, destroying important habitats for mammals, reptiles, birds and invertebrates," the spokesperson said.
Parks Victoria is currently running Operation Crookwell until December, aiming to target people who are allegedly cutting down trees to supply buyers with firewood.
"To protect the habitats of native animals, Parks Victoria rangers are patrolling seven days a week and outside business hours in a crackdown on illegal behaviour following several cases of illegal tree felling and removal within parks and reserves around Shepparton and across northern Victoria.
"New technology in the form of smaller cameras and those with the ability to send photos of offenders to Parks Victoria in real time are also being used to allow rangers to more quickly detect illegal activity and take action."
Parks Victoria regional director Daniel McLaughlin said tree hollows were an important habitat for many local wildlife species and encouraged members of the community to report any environmental offences.
“Tree hollows provide precious habitat for hundreds of species of native birds, mammals, reptiles and invertebrates like the squirrel glider, brush-tailed phascogale, regent parrot, red-tailed black cockatoo and the tree goanna," Mr McLaughlin said.
“If you observe anyone causing damage to park habitat, removing wood or have information about environmental offences please contact Parks Victoria on 13 19 63.
"All information will be treated confidentially.”