A New York hedge fund manager testified that a private investigator offered to have a movie producer he was suing killed.

Adam Sender of Exis Capital told the court yesterday that he declined the “frightening” offer.

Sender said he hired Los Angeles private detective Anthony Pellicano, who is on trial in federal court on wiretapping and racketeering charges, to probe Aaron Russo, with whom Sender invested $1.1 million. The hedge fund manager eventually sued Russo, who he said stole that money, and hired Pellicano, who he paid $500,000, after Russo managed to avoid process servers for more than a year.

Russo died of cancer last year; Sender said he recovered just $25,000 of his investment. But according to Sender, he wasn’t the only one frustrated by Russo.

Testifying under an immunity deal, Sender said that Pellicano tapped Russo’s phone for a year, and had played him several of the taped calls. But an irritated Pellicano, meeting Sender at the latter’s Bel-Air mansion, suggested to the hedge fund manager that he could “authorize” the p.i. to have the producer “murdered on the way back from Las Vegas.”

“He would have someone follow him back, drive him off the road and bury his body in the desert,” Sender testified.

Pellicano, who faces no charges related to the alleged offer to have Russo killed, did not dispute Sender’s account.

“Didn’t Mr. Pellicano say, ‘You’ve spent all this money, why don’t you just whack him?’” Pellicano, who is serving as his own attorney, asked Sender. “Didn’t Mr. Pellicano say, ‘If you feel so badly about it, why don’t you just have him killed?’”

“He might’ve phrased it that way,” Sender acknowledged.