PROVIDENCE — A Canadian life-insurance company is arguing that one of the state’s leading estate lawyers is illegally wagering on human lives by securing policies in the name of elderly people to benefit unrelated investors.

Sun Life Assurance Company of Canada has filed two civil lawsuits in U.S. District Court alleging that Benjamin G. Paster, a partner with the Cranston firm Paster & Harpootian, and his associates engaged in fraud and conspiracy. The lawsuit says Paster and Vincent Passananti, owner of Meridian Benefits Group, secured life insurance for elderly people that in turn would be sold to stranger investors.

Sun Life says it issued the policies based on misrepresentations Paster and others made on the application. The company says speculators seeking high profits would initiate policies for elderly people with a relatively high net worth and limited life span. Sun Life is seeking unspecified damages and to be released from the contracts.

The industry refers to these policies as stranger originated life insurance, or STOLI, policies.

In court documents, Paster has denied the allegations. He asks that the suit be dismissed, arguing there is no claim under Rhode Island law that would support the court’s upending of the contract. He says he fulfilled his duties as a trustee for the people who took out policies and that he is being unfairly maligned. Neither Paster nor his lawyer, Robert M. Duffy, returned phone calls seeking comment. Passananti also did not return a phone call placed to his Providence office.

Paster argues in court documents that state law establishes that a contract cannot be voided unless the misstatements contribute to the triggering of the policy becoming due, in other words the insured person’s death.

According to the lawsuit, Passananti and Paster solicited Bette Levy, 73, of California, to apply for a $10-million policy in March 2007, with the understanding that she would be provided with “free insurance.” Under the arrangement, a third party would cover all costs with the intention that that party would become the beneficiary in two years. That means when Levy died, the third party would collect on the policy.

The market for buying a stranger’s life insurance policy came to the fore with the AIDS epidemic in the 1980s. The shorter the life expectancy, the higher the returns, and investors would pay the AIDS sufferers money for the policies that they could use to cover medical bills or other expenses. More recently, elderly people have been recruited.

Paster, whose offices are in the former boy’s reform school in Cranston, was named one of the nation’s top 100 attorneys by Worth magazine in 2005.

kmulvane@projo.com