Not ENTIRELY true.
Indeed there is no connection to conspiracy theory of shadowy power brokers that are pulling the strings behind the scenes today. But the original Bavarian Illuminati was founded by many who were already Freemasons and created their degrees and rituals based on those of the blue lodge. Of course, this doesn't mean much...it's like Freemasonry's connection with college Greek fraternities.
However, the original Illuminati, albeit secret, was just a philosophical society that believed in enlightenment values..not so different than us in that aspect. They did also use Masonic lodges for bases of operation and even conferred Illuminati degrees in them. They actively tried to recruit Freemasons to join their ranks. When the founder of the society and writer of rituals began to disagree on who had control and it fizzled out over the years.
My source is "The Secret School of Wisdom - The Authentic Rituals and Doctrines of the Illuminati" by Josef Wages, Reinhard Markner, and Jeva Singh-Anand
In fact, George Washington knew that the Illuminati illegally using their lodges and wrote this letter:
Mount Vernon, October 24, 1798.
Revd Sir: I have your favor of the 17th. instant before me; and my only motive to trouble you with the receipt of this letter, is to explain, and correct a mistake which I perceive the hurry in which I am obliged, often, to write letters, have led you into.
It was not my intention to doubt that, the Doctrines of the Illuminati, and principles of Jacobinism had not spread in the United States. On the contrary, no one is more truly satisfied of this fact than I am.
The idea that I meant to convey, was, that I did not believe that the Lodges of Free Masons in this Country had, as Societies, endeavoured to propagate the diabolical tenets of the first, or pernicious principles of the latter (if they are susceptible of seperation). That Individuals of them may have done it, or that the founder, or instrument employed to found, the Democratic Societies in the United States, may have had these objects; and actually had a seperation of the People from their Government in view, is too evident to be questioned.
My occupations are such, that but little leisure is allowed me to read News Papers, or Books of any kind; the reading of letters, and preparing answers, absorb much of my time.
http://memory.loc.gov/cgi-bin/query/r?ammem/mgwfield(DOCID+@lit(gw360395))