Vancaskerkin's informants would certainly find out very quickly that the PCs did not complete their mission of eliminating Smeed and get word back to Saul. What he needs is a patsy, and likely has several possibilities set up around the city for just such an occasion. Perhaps some old drunk who can be convinced by a hired charm spell that he offed the manager at the Gold Goblin to steal his purse and dumped his body in the harbor and that he feels the need to brag about it at his local watering holes. With an adequately booze-clouded mind to back up the enchantment, he ought to even believe it himself.
Remember there are no clues for the PCs at Feldin's house and Saul's extremely high Bluff skill should make it difficult for the PCs to detect any deception on his part.
Either way, Smeed would definitely suffer some sort of tragic accident in the next few weeks since he is simply too dangerous for Saul to allow him to live. Probably something pedestrian like a falling water barrel being unloaded from a ship or even one of the many nightly muggings or barfights could "coincidentally" do him in. However, the PCs should not find out about it immediately (after all what's one more untimely death among the riff-raff of Riddleport), but maybe only learn of it if they go back to visit him sometime later and find the building vacant and some nearby washer-woman tell of the tragic accident.
As for suspicion's of Saul, they're not entirely unwarranted even by his own admission of his past ways, but as the events at the Foamrunner and during the Raid unfold, his story as the aggreived party should receive some pretty good reinforcment in the PCs' minds.
