Police had not found a body by early Tuesday.
A call to Israel's lawyer was not immediately returned.
Israel wrote that he once considered killing himself after his business partner was sentenced to prison for fraud.
Now Israel's disappearance marks the latest chapter in the colorful life of the son of a prominent New Orleans family who lied for years about his successes in the red-hot hedge fund industry, former investors and industry analysts said.
With promises of big returns, the 48-year-old Israel wooed clients like Indiana's DePauw University and dozens of wealthy private investors into his Stamford, Connecticut-based fund.
But for eight years, Israel and his partners lied to investors by fabricating returns, creating a fake accounting firm and having launched a broker dealer to clear trades, court papers show.
As his lies unraveled, Israel said he suffered debilitating back pain, abused medication and endured six spinal surgeries.
"Living the lie on a daily basis cost me my marriage as my life spun out of control and this horrible secret I lived literally ate me up from the inside. My daily guilt was so overwhelming that it impacted my body physically," Israel wrote to U.S. District Judge Colleen McMahon, who sentenced him to 20 years in prison in April.
But former investors recall a more confident Israel, remembering him as having been a fairly good trader who spun elaborate lies when they pressed him about how he made money.
Still Israel acknowledged an urge to die instead of living out his days behind bars.
"I considered taking my own life," Israel wrote to McMahon, adding: "But I also have learned that my life is not mine to take and I have to accept responsibility for my actions no matter what the consequence."
If Israel did kill himself it would mark the second suicide in as many months by former hedge fund managers convicted of fraud. In May Kirk Wright, who had was convicted of having cheated clients including professional football players out of $150 million, hung himself in his jail cell.