Nevada court rejects U.S. request on Okada probe, says Wynn suit can proceed

A Nevada state judge ruled on Friday that a civil lawsuit between Wynn Resorts and Japanese billionaire Kazuo Okada could proceed, rejecting the U.S. government's request to keep it on hold for another six months to protect the identity of witnesses in a criminal probe into Okada's business in the Philippines.

In requesting a third, six-month "stay of discovery," Department of Justice attorney Laura Perkins told a hearing that allowing the civil case to proceed risked causing "irreparable harm if the witnesses' identities are revealed."

Clark County District Judge Elizabeth Gonzales, who had already granted two previous motions suspending the civil proceedings for a total of 12 months, said the U.S. government had already been given enough time.

"I'm tired of waiting. It's been a year," Gonzales said, adding that she hoped her ruling would prompt the government to accelerate its criminal investigation.

She did, however, grant the government's request to have the names of anyone cooperating with the investigation redacted in court files.

The existing stay of discovery - the process by which parties in a lawsuit exchange information and evidence - is due to expire on May 5.

A spokesman for Wynn declined to comment.

No representative for Universal Entertainment Corp <6425.T>, the Japanese gaming machine maker founded by Okada and the company at the heart of government's criminal investigation, could be reached for comment.

For more than two years, Okada has been locked in a legal battle with Wynn Chief Executive Steve Wynn, during which the former business partners have exchanged allegations of illegal conduct.

Wynn forcibly redeemed Okada's 20 percent stake in the U.S. casino operator in 2012 at a discount, alleging Okada had made improper payments to Philippine government officials to advance his planned $2 billion casino project there. Wynn's civil lawsuit against Okada centers on allegations that Okada breached his fiduciary duties as a director in making those payments.

Okada has denied any wrongdoing and filed a counterclaim to nullify the share redemption.

The U.S. criminal investigation is focused on $40 million in payments made by Universal affiliates to a consultant in the Philippines in 2010.

The payments, which were made around the same time Universal lobbied for concessions for its casino on Manila Bay, are also being investigated by the Philippine government and the Nevada gaming regulator, according to people familiar with the matter.

Universal has filed a defamation suit against Reuters in Tokyo for its reporting on the $40 million payments. A Reuters spokesman said the news agency stands by its reporting.

(Writing by Nathan Layne in Tokyo; Editing by Raju Gopalakrishnan)