Coins millionaire bankrupted by a $1.2m music box



2015-06-26 11:41:06

Coins millionaire bankrupted by a $1.2m music box

Numismatics made this Florida collector rich, but another obsession led to his downfall

Mark Yaffe from Tampa, Florida,is a multi-millionaire who built up hisfortune by trading in rare coins.

Yaffe'scoin obsessionbegan whenhe was at school in the 1970s, andculminated in himdropping out of college and abandoning his planned business career -because it was taking up too much of his time with coins.

"I was learning more with coins than in school," Yaffe later explained to the Tampa Bay Business Journal. "And I figured I was sleeping too much in class."

Nevertheless,Yaffe had apparently donethe right thing. Herose rapidly through the National Gold Exchange - the world's largest wholesaler of gold and silver coins - and developed areputation for speed and accuracy.

Yaffe's expertise meant that hecould quietly sift through a pile of coins and separate them according to minute markings.

Eventually,the successful coin dealerhad a mansionbuilt to his specifications - in the style of a British palace, no less,complete with trappings such as chandeliers made from Venetian glass.

Today, Yaffe admits that the house was probably a mistake. But it wouldn't be his biggest mistake.

In 1994,the coin obsessivedeveloped a new passion: antique music machines.

Yaffeundertook his unusual new hobbywith characteristic dedication:buying pianolas, orchestrons, music boxes and other devices.

He joined Music Box Society International and spent hundreds of thousandsof dollarsat auction on machines dating from the end of the 19th Century to WW2.

Soonafter, Yaffe coaxed a German collector into parting with his violina (an automated piano with attached violins) for $450,000. Hethen restored it, bringing the value up to $1m.

But Yaffe's new hobby was already leading him to compromise his other assets. First, he sold his Ferrari and moved to a relatively small house.

But, unlike numismatics,Yaffe's obsession with self-playing pianos and the like was taking up too much space.

To solve the problem, the wealthy collector decided to build a 29,000 square feet house built around a 3,000 square feet central hall.

He filled the hall with musicmachines, some over 12 feet tall (oneeven featureda miniature Cambodian tightrope-walking dancer).

Yaffe's acquisitions were growing in price; includinga $1.2m Hupfeld Helios, a cabinet containing 256 pipes that mimic clarinets, flutes, cellos and other instruments.

He then paid a staggering $1.3m on top of the $1.2m purchase price, to havethe Hupfeldrestored.

And then the recession happened.

Yaffe, like many others, was simply spending too hard against his sizeable income.

His bank's demands for the repayment of a $35m loanforcedhim puthis house on the market (for $25m)and attend hearings to discuss bankrupty.

Yaffe has also been accused of misusing National Gold Exchange money, relating tovarious projects, which he denies.

To cope with his bankruptcy, Yaffe will have to part with some of his most treasured music machines.

Hehas so far committed to selling the 15 most expensive pieces. With luck, that should bring his head back above water, andenablehim to retain some of his incredible collection.

If medals were awarded for dedication to collecting, then Mark Yaffe would certainly have earned a couple.

But his experiences are also a warning to collectors:plan ahead, and alwaysstay well within your financial means.

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