Many of those who are not in hot water with the law are, however, facing a different quandary: they're getting poorer. Just under half of the 1,000 richest have seen their wealth shrink, with 37 of them enduring losses of over 50 percent. Overall, there were 20 fewer billionaires in 2012 than in the year before.

John Bussey of the Wall Street Journal also noted the curse of the rich list: "Very soon after [China's wealthiest] make the list and get publicity, their share prices begin to decline. The companies themselves are more subject to government cutting off subsidies to them, and the individuals who lead them are more subject to investigation."

Take Zhou Zengyi as an example. Once China's 11th richest man, valued by Forbes at $320 million in 2002, he has since been arrested twice and is currently serving a 16-year sentence. Zhou's transgressions even took Chen Liangyu, Shanghai's Communist party secretary, down with him.

What accounts for the sharp rise and fall of China's wealthiest? In a business environment in which personal connections and favors -- referred to as guanxi in Chinese -- predominate, many tycoons have amassed large fortunes without concern of rules and regulations. However, such a fast and loose atmosphere can cut both ways.

Xu Ming, a billionaire who was once China's eighth richest citizen, has been detained and under investigation since March 2012 because of his ties with fallen Chongqing Mayor Bo Xilai. Likewise, four others on the list have either been charged with economic crimes, are in detention, or already languishing in prison.

Arrests like these indicate that China has begun to take corruption more seriously. Again, however, identifying which targets deserve indictment remains largely arbitrary. The Economist noted that despite the number of high level cases coming to light in the country, many more remain hidden: "If they wanted to, China's authorities could probably find grounds for accusing most of the country's richest people of bending (if not breaking) the rules. But China's legal culture thrives on the principle of 'killing the chicken to scare the monkeys.'"

One of these "chickens" is Gong Aiai, a former banker who amassed over 20 properties worth a combined 1 billion yuan (USD $159 million). After citizen-led online searches uncovered her massive wealth, the government had no choice but to investigate. Apparently, Gong used false residence permits to facilitate her property acquisition, a crime that will cause her to go to prison.

Though noteworthy considering the large sum of money involved, Gong's case is hardly unusual. However, her fall from grace raises a key question. Why do so many wealthy Chinese risk everything to get rich?

One reason is simple economics. With sky-high housing prices, few Chinese can afford to buy a home with their salary alone.