SQL brain fade: CASE statement

I have a complex SELECT statement and I'm having trouble figuring out a way
to add some new logic using CASE.  FACTOR and VALUE are column names; '1',
'2', 'A', and 'B' are host variables.  In code that doesn't work, here's
what I want to do:

 

select * from file                                         

where

{other selection conditions)

and                                                        

case when FACTOR = '1' then VALUE = 'A'        

     when FACTOR = '2' then VALUE in('A','B')    

     else null

     end

and

(more selection conditions)

 

In English: 

If FACTOR is '1', select all records where VALUE is 'A'.

If FACTOR is '2', select all records where VALUE is 'A' or 'B'

 

I think I have three choices: figure out how to do to this with a CASE,
write a stored procedure to do the logic, or extend the SELECT statement
like this:

 

select * from file                                         

where

 

{other selection conditions)

and                                                        

FACTOR = '1' and VALUE = 'A'        

and

(more selection conditions)

 

OR

 

{other selection conditions, same as above)

and                                                        

FACTOR = '2' and VALUE = 'B'        

and

(more selection conditions, same as above)

 

                                                

Is this a case of "you can't get there from here", or have I made a goofy
error, or have I failed to design the solution properly?

 

Thanks,

Reeve