Rheumatoid arthritis is a complex disease that appears to involve multiple genetic and environmental factors. Using the Genetic Analysis Workshop 15 simulated rheumatoid arthritis data and the structural equation modeling framework, we tested hypothesized "causal" rheumatoid arthritis model(s) by employing a novel latent gene construct approach that models individual genes as latent variables defined by multiple dense and non-dense single-nucleotide polymorphisms (SNPs). Our approach produced valid latent gene constructs, particularly with dense SNPs, which when coupled with other factors involved in rheumatoid arthritis, were able to generate good fitting models by certain goodness of fit indices. We observed that Gene F, C, DR, sex and smoking were significant predictors of rheumatoid arthritis but Genes A and E were not, which was generally, but not entirely, consistent with how the data were simulated. Our approach holds promise in unravelling complex diseases and improves upon current "one SNP (haplotype)-at-a-time" regression approaches by decreasing the number of statistical tests while minimizing problems with multicolinearity and haplotype estimation algorithm error. Furthermore, when genes are modeled as latent constructs simultaneously with other key cofactors, the approach provides enhanced control of confounding that should lead to less biased effect estimates among genes as well as between gene(s) and the complex disease. However, further study is needed to quantify bias, evaluate fit index disparity, and resolve multiplicative latent gene interactions. Moreover, because some a priori biological information is needed to form an initial substantive model, our approach may be most appropriate for candidate gene SNP panel applications.