Unfortunately, this isn't true. There are people who are illegal. In fact, in South Dakota, all of us are.
Recently, the South Dakota Supreme Court upheld the state's internal possession law. This law basically states that if you possess an illegal substance inside your body, you can be charged for possession of that substance. This applies to all illegal chemicals. If you are suspected of having drugs inside your body, you are forced to submit to a urine screening. If you refuse, medical personnel are bound by the state's medical ethics laws to forcibly extract a sample by catheter. If this drug test turns up positive for illegal substances, you are then charged with possession of those substances.
The problem here is that the average human possesses some number of illegal chemicals within their body that are completely natural, such as:
According to a strict interpretation of the law, then, any human being that steps foot in this state is a walking Class A Felony. Therefore, no one is illegal, unless you happen to be a human being in South Dakota. Ain't that grand?
Sources:
"South Dakota 'Internal Possession Drug Law Upheld," Stop The Drug War. February 27th, 2004. <http://stopthedrugwar.org/chronicle/326/southdakota.shtml> (October 13, 2004).
"Lists of Controlled Substance Schedules," US Department of Justice Drug Enforcement Administration. <http://www.deadiversion.usdoj.gov/schedules/schedules.htm> (October 13, 2004).