NEW YORK — Steve Case, who stepped down as chairman of AOL Time Warner Inc. in 2003, still draws a crowd. It's April, and he's describing the benefits of yoga and organic food to about 600 people at the 10th annual Lifestyles of Health and Sustainability conference at the Fairmont Hotel in Santa Monica, Calif.

Booths featuring Mum's Original hemp and flax supplements, Numi organic tea and shirts made from bamboo and soy fibers line the walls. Case, who last year started a company focusing on healthcare and luxury resorts, tells his audience that the U.S. is ripe for a transformation.

"The objective of this movement must be to make healthier, more sustainable lifestyles available to every American," says Case, 48, who's wearing an open-collar shirt and khakis. "If we achieve that, we will effectuate nothing short of a revolution in this country."

The founder of Revolution LLC is making big promises. He's done it before. In 2000, as chief executive officer of America Online Inc., Case pitched the acquisition of Time Warner Inc. to his shareholders, saying it would create new ways for people to shop and communicate.

Case was wrong. The biggest acquisition in history cost investors more than $100 billion from its 2001 close through July 28, according to data compiled by Bloomberg. That staggering loss hasn't weakened Case's stand that the deal was the right thing to do.

"The merger was a good idea that was not well executed," Case says at Revolution's offices in Washington. "I was as disappointed as anybody by the outcome. But now it's time for me to move on."

KAUA'I ACQUISITION

As Case builds his next venture, he's battling two lawsuits filed in 2005 that accuse him of fraud and insider trading. The complaints stem from another acquisition he made in 2000 as the AOL-Time Warner merger was about to close.

Case reached into his own pocket to purchase Grove Farm Co., a land-holding company that manages a golf course on Kaua'i. The Grove Farm shareholder suits allege Case cheated investors out of $750 million.

The deal, and a stake Case earlier took in Maui Land & Pineapple Co., helped make Case the second-biggest private land owner on Kaua'i and the island of Maui. His Hawai'i holdings are worth at least $150 million, based on the sale price of Grove Farm and the market capitalization of Maui Land & Pineapple on July 10.

In forming Revolution, Case has assembled a cast of directors that includes executives who, like him, have presided over billions in shareholder losses.

CONFLICT ALLEGED

Carly Fiorina, 51, was ousted as CEO of Palo Alto, Calif.-based Hewlett-Packard Co. in 2005 after the company's stock dropped by half during her five-year reign. In 2004, Franklin Raines, 57, was forced out as chief of Washington-based Fannie Mae, the biggest U.S. home mortgage lender, after regulators concluded the company had manipulated its accounting, spurring a loss of about $30 billion in market value.

The Grove Farm lawsuits filed in Hawai'i turn on an alleged conflict of interest involving Case's father, Dan Case, an attorney who acted as his son's agent while his law firm, then called Case Bigelow & Lombardi, represented the seller, Grove Farm. The complaints claim that Dan Case, 81, and his firm helped freeze out other bidders and funneled information to Steve Case about competing offers, steering the sale to him at a sweetheart price of $26 million.

Steve Case says he did nothing wrong. "I don't think from what I've read that the claims have any merit," he says. Dan Case's lawyer, Corey Park, says the claims are baseless. Grove Farm and its former directors have denied the accusations in court papers. Their lawyer didn't return a call seeking comment.

EXPERT'S OPINION

"It's nonsense," says Paul Alston, a Honolulu lawyer who represents Steve Case, about the shareholder claims. Case won the Grove Farm bidding only after agreeing to pay more than any other credible contender, Alston says.

Park says the conflict isn't an issue because Grove Farm's board approved of the arrangement in which Dan Case advised his son while his firm worked for the company. The firm, now known as Case Lombardi & Pettit, also didn't respond to a call.

Charles Wolfram, a retired Cornell Law School professor and author of a legal ethics textbook, says Grove Farm couldn't waive the conflicts because they were so pervasive. The arrangement "seems to have been calculated only to serve the interests of Stephen Case and not at all to serve the differing interests of Grove Farm and its shareholders," Wolfram, an expert hired by the plaintiffs, wrote in February in a letter submitted to the court. Wolfram didn't return a call seeking comment.

LOOKING FOR BALANCE

Case, who plans to spend $500 million on Revolution, says his interests go beyond turning a buck. With Revolution and Grove Farm, Case says, he plans to do well by doing good.

"People are looking to achieve a sense of balance, to embrace our responsibility to our environment, to each other and to themselves," he says. "We want to be a leader in offering products, services and ideas that allow everyone to act on this growing understanding."

So far, he's bought 11 companies, some aimed at the rich and others targeting a broader market of consumers interested in health and the environment. Case has divided Revolution into three units. Revolution Resorts runs a luxury vacation club and southern Arizona's Miraval spa. For about $500 a night, Miraval guests can achieve self-awareness and balance in their lives, the company says on its Web site.

HYBRIDS, HEALTHCARE

Revolution Living operates Lime, a cable channel with programming on yoga and natural beauty aids, and Flexcar, a car rental company. Hybrid gas-electric vehicles make up 40 percent of its fleet.

Revolution Health, Case says, will improve healthcare by making it more responsive to the needs of patients. The unit operates clinics in retail stores, sells health insurance plans and expects to start a Web site later this year that provides news and treatment information.

Case's healthcare businesses aren't exactly revolutionary, says Matthew Holt, a San Francisco-based independent healthcare consultant. He says Case is piggybacking on established trends rather than bringing new ideas to the industry. Case's online portal, for instance, will compete with WebMD Health Corp., the descendant of WebMD Inc., which was founded in 1998.

THE RISE OF AOL

Case, who attended Punahou School, left Hawai'i to attend Williams College, a private liberal arts school in Williamstown, Mass., where he earned a bachelor's degree in political science in 1980.

Case says his interest in marketing spurred him to take a job as an assistant brands manager for two years at Cincinnati-based Procter & Gamble Co., according to a 2005 interview that took place at the Computer History Museum in Mountain View, Calif. After working on an unsuccessful hair-conditioning product, he moved to Wichita, Kan., in 1982 to be manager of new pizza marketing at Pizza Hut Inc.

A year later, Case's older brother, Dan, then an investment banker at Hambrecht & Quist Group in San Francisco, introduced him to the CEO of failing video game maker Control Video Corp. The company hired Case to work in marketing. In 1985, Case helped found Quantum Computer Services, an online services company, from the remnants of Control Video.

In 1991, Quantum changed its name to America Online Inc. to capitalize on the growing popularity of the service. Case, who started at Quantum as a vice president, rose to CEO in 1993, the year AOL began sending out millions of free CD-ROMs to encourage people to sign up. AOL had attracted more than 20 million customers by the end of 1999, making it the largest online service provider.

In January 2000, Case stunned Wall Street when he announced that his upstart firm planned to buy Time Warner, the world's largest media company, for $178 billion in stock. Case says he agreed to let Time Warner CEO Gerald Levin lead the new company to get the deal done.

By 2002, Case was also feeling the heat from AOL Time Warner shareholders. Levin resigned in May of that year after a drop in ad revenue helped push down the company's shares 58 percent in the 16 months he ran it. Time Warner executive Richard Parsons took over as CEO.

Two months later, the company said federal authorities were looking into allegations of improper accounting at AOL. The company, which denied the charges, would pay $450 million in settlements with the government.

"I just think it was very, very difficult to make these cultures work together," says Mark Stavish, AOL's former head of human resources, about why the merger failed. He says operating executives at Time Warner, a conglomerate that dates back to 1923, were promoting their own companies' interests rather than heeding calls to integrate with a rapidly growing Internet firm.

Case resigned as chairman in 2003, saying he wanted to spend more time with his family and at the Case Foundation, a charity he set up in 1997 with his second wife, Jean, that has paid for after-school technology programs for poor children.

'GREAT PRIDE'

Case says his plans for Hawai'i and Revolution aren't an attempt to restore his reputation after the failure of the AOL-Time Warner merger. Shareholders have recovered more than $2.5 billion in settlements, and some investors, including pension funds, are still suing Time Warner.

"Maybe this seems inappropriate or arrogant," Case says. "I don't feel like I need to be rehabilitated. I actually look back over the last 20 years with great pride."

Residents of Kaua'i, where the first Grove Farm shareholder lawsuit goes to trial in October, are reserving judgment. On an overcast day in April, a group of tourists visits the old George Wilcox home, which is now a museum. The tour guide, a woman who lives on Kaua'i, tells them that Steve Case now owns Grove Farm.

"So it's in good hands, then?" one of the tourists asks. "Well, we hope so," says the guide, crossing her fingers on both hands.