My guess is that while Michael had suspected Fredo, I don't think Michael actually thought that he would find evidence against his brother. When it occurred, it was was too overwhelming for Michael to comprehend.
As you know, goombah, this has been a subject of plenty of discussion here.
Michael didn't initially suspect Fredo of treachery. When he said to Tom, right after the Tahoe shooting, "Fredo? He's got a good heart, but he's weak and stupid, and this is life and death," he meant that Fredo didn't have what it took to run the family in his absence--not that Fredo was a conspirator. And, I don't think Michael necessarily had Fredo bring the money to Havana to test him. Tom couldn't be spared because he was running the family back home. And, by not having Rocco or Neri bring it, Michael was signaling Roth that he hadn't dismissed them as possible conspirators. So, Fredo was the logical choice.
But then there were the suspicious looks Michael gave Fredo whe he asked who else was in Havana...and when he introduced Johhny Ola to Fredo...unmistakably suspicious.
