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Is this true? Is there a place on the google where i can get a copy of these "bad" words.
A lot of people think that Google keep lists of words where penalties are applied if you trip the penalty rules. This doesn't mean that everyone's penalised (that wouldn't make sense), but if true it does mean that you might get away with a more aggressive SEO approach for phrases not on those lists.
There is, as always, a contrary view. It can be argued that the 'money phrases' people see penalised are more likely to attract spammy pages to compete for them. Personally I continue to sit on the fence.