No, it's not true. What Google don't allow is arbitrage - using adwords to send visitors to a site purely in the expectation of making more money from clicks on adsense then you spent on adwords. But they are unlikely to ban you in the first instance - they either won't run the ads at all, or just make it prohibitively expensive.
OOOh....I wonder how they would be able to tell... I guess if you don't update often they'll see that you are just making the site for profit. Thanks!
Magda is right. They will either make the cost per click too expensive or they will make your adsense ads give less money.
have a site that uses Adsense - whenever I get traffic from Adwords, my Adsense revenue dives I can really only use Microsoft and Yahoo for traffic on it