There has always been a part of me that thinks Michael may have been testing Fredo with the suitcase full of cash. At that point, Michael was not entirely certain the identity of the traitor. If you remember, Michael appeared relieved and appreciative that Fredo made it to Cuba with the cash... as anyone would under the circumstances. Many things could have gone wrong as TB stated above but it seemed Michael expressed more of a genuine relief to see Fredo.

If there was true malice in Fredo's heart - what would have stopped him from taking the money and running? In 1958, Fredo could have disappeared and lived pretty well with 2 million dollars. Granted he would have to go far away and out of the country - Asia, Australia, etc. Europe would not even be an option... Corleone contacts would have found his location rather quickly. It's almost as though Michael was willing to spend the 2 million to expose the traitor - no matter who it was. By the way - what became of the suitcase of cash?