LAS VEGAS (Reuters) - A former Chicago commodities trader who disappeared in 1979 and was found earlier this year working in a Las Vegas casino, pleaded guilty to fraud on Monday, authorities said.

Arthur Gerald Jones, 73, who was arrested in July after he was discovered living under the assumed name of Joseph Richard Sandelli, admitted to one count of fraud stemming from a driver's license application, Nevada Attorney General spokeswoman Jennifer Lopez said.

Jones, who entered his guilty plea under an agreement with prosecutors, originally had been charged with four felony charges related to identify theft and fraud.

Jones will not serve time in jail but will receive probation, the terms and conditions of which are to be determined by the Nevada attorney general, according to the plea deal.

Restitution to the U.S. Social Security Administration and the man whose name was falsely used in Jones' application for a Nevada driver's license in 2008 will be determined by the court as part of the agreement.

Jones disappeared over three decades ago from Highland Park, Illinois, and police believed at the time that he may have been a victim of foul play, citing gambling debts and possible links to organized crime, according to the Nevada Department of Motor Vehicles. He was declared dead in 1986.

But earlier this year, Jones was found working at the Rampart Casino in Las Vegas, a job he had held for a decade, the Nevada vehicles department said at the time of his arrest.

After Jones resurfaced, an investigator concluded that he had "voluntarily left his family and friends in 1979, possibly fleeing the mob" to start a new life, according to an affidavit filed by investigator Doug Staubs.

Jones, who once held a seat on the Chicago Board of Trade, told authorities that following a trading mistake, he had been forced to sell his seat to pay his debt, the affidavit said.

He then decided to leave his family, citing a troubled marriage, unemployment, and a desire for a "fresh start," according to the affidavit.

His former wife gave a different story, telling authorities he sold his seat to pay personal gambling debts. She said he once bet $30,000 on a basketball game and at one point took out a second mortgage to pay gambling debts, the affidavit said.

Category E felonies, the least serious felony class in Nevada, may carry prison time but more often result in probation and a monetary fine.

Jones' next court appearance will be on January 31, 2012.

(Writing and reporting by Mary Slosson, Editing by Dan Whitcomb, Steve Gorman and Greg McCune)