Top Stories
Top Stories

China sends a real estate mogul to prison

Andrew Jacobs
Gong Aiai on trial at the People's Court of Jingbian County in northwest China's Shaanxi Province.

To millions of Chinese, the enterprising banker from the gritty northern province of Shaanxi is known by the nickname House Sister, and it is not exactly a term of endearment.

On Sunday the woman, Gong Aiai, who was accused of amassing dozens of high-end properties by forging or illegally purchasing documents, was sentenced to three years in prison, according to the state-run Xinhua news service.

(Read more: Fear of missing outfuels China property market)

After her exposure earlier this year by online whistle-blowers, Ms. Gong and her voracious appetite for real estate became a lightning rod for the frustrations of poor and middle-class Chinese who have been priced out of the nation's booming property market.

To many detractors, her case also provided further evidence of how government officials and executives at state-owned enterprises can use their positions to grow unimaginably rich.

The Dark Side of China's Real Estate Boom

Ms. Gong, a former vice president of the Shenmu Rural Commercial Bank, was accused of accumulating 41 apartments in Beijing and several others closer to home by presenting illicitly obtained national identity cards and hukou, the coveted residency permits required when buying residential property. Prosecutors say her real estate portfolio was worth $160 million.

Having multiple identity cards and hukou allows a person to skirt restrictions aimed at dampening real estate speculation and rules that bar out-of-towners from buying property in overheated markets like Beijing. During a brief trial last week, Ms. Gong denied the charges, according to the state news media.

(Read more: Chinaproperty immune to tapering: China's richest man)

Her downfall follows that of a number of other figures with grotesque spending habits. There was Brother Watch, a midlevel civil servant known for his large collection of luxury timepieces who was convicted of bribery last month, and Grandpa House, a former police chief in Guangdong Province who was accused of using fake identity cards to purchase 192 homes.

More from the New York Times:

Ban on Items to North Korea May Stall Nuclear Bid
Israel Accuses Iranian Man of Spying
Senate Action on Health Law Moves to Brink of Shutdown

Although these and other cases were exposed by muckraking Internet sleuths or rivals of the accused, they have been viewed through the lens of the antigraft campaign started by President Xi Jinping, who has promised to take down "tigers and flies" in his war on self-dealing, bribery and official extravagance.

In September, Bo Xilai, once one of China's most powerful officials, was sentenced to life in prison for crimes that included bribe-taking and embezzlement of funds worth $4.4 million.

Ms. Gong's downfall, however, did little to mollify the public's anger. Writing on the nation's most popular microblog service, Sina Weibo, many people criticized the court for failing to address how Ms. Gong had accrued the money to buy so many properties. Others simply thought the sentence of three years was too short. "The law is like a prostitute," said one posting. "Both the rich and the powerful can have fun with it."