You're right. The comment that you should buy stock with legal income and pay back a mortgage with the illegal income misses the point completely. Buying stock was just one example of how transfering illegaly acquired funds into something that increases in value does not protect your initial investment. Anything you do with illegal income would be seizable property.
Paying into a mortgage as the same effect. As you pay back a mortgage you acquire equity in the property. The government would then be able to seize your equity in the house, meaning they could sell the property and after paying back the remainder of the mortgage keep the difference.
That's not the point I was making. Let's say I put 1 million dollars into stock, and it grows to 1.1 million. At the same time I have a mortgage on a .7 million dollar house, with total payments of 1 million.
In this case I much prefer them to take the house, because it's significantly less valuable.
