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Detectives were investigating a claimed sighting of the 54-year-old after he failed to appear in court in the United States where he is accused in an alleged multi-million dollar stock-option fraud and running a secret "slush fund."
US officials issued an arrest warrant earlier this month for the former chief executive of New York-based Comverse Technology Inc., charged with two other former executives who have surrendered to the authorities.
"We have received a message, we're making inquiries," said a senior law enforcement official who declined to give his name.
"We have not found him yet."
The search started after an Israeli newspaper reported that a private investigator had spotted Alexander, who holds dual US and Israeli citizenship, at a home on Sri Lanka's western coast, near its biggest city Colombo.
The US government said it had seized 45 million dollars held in US bank accounts and accused the trio of running a "money laundering" scheme that had funnelled over 57 million dollars