Here is what the denial letter says
Reasons: Poor Moral Chacacter
CFR8 Reference: Part 316 Generale Requirements for Naturalization
Section 316.10 Good Moral Character
On February 06, 2006, You were arrested and charged with Theft 3rd Degree. You were found guilty, after you plead Not guilty. The Court Granted 12 months Deferred sentence imposed, monitored unsupervised probation 12 months, with imposed charges of $480. No criminal Violations for 12 months, No contact per court directive for 12 months, stay out of trouble. In April 22 2007, The court dismissed and closed your case based on other deferred compliances.
Section 101(a)(48)(A) of the act states: the term," conviction" means, with respect to an alien, a formal judgment of guilt of the alien entered by a court or, if adjudication of guilt has been withheld, where-(i) a judge or jury has found the alien guilty or the alien has entered the plea of guilty or nolo contendere or has admitted sufficient fact to warrant a findings of guilt, and (ii) the judge has ordered some form of punishment, penalty, or restraint of the alien's liberty to be imposed.
This definition provided clear directions for the service when evaluating different state statues providing ameliorative procedures affecting the "finality" of a conviction under state law. When an alien is granted diversion, or some sort of deferred adjudication subsequent to a plea of guilt, and some form of penalty or punishment is ordered, there exists, for purposed of immigration, a conviction. Therefore, USCIS concludes that You were convicted of theft.
The United states immigration and naturalization services ( USCIS) has considered your record. Your testimony and service records indicate that you were arrested for theft of February 06, 2006 and found guilty. You committed an unlawful act that adversely reflects upon your moral character, and you have not provided sufficient information establishing extenuating circumstances for your actions at the time of the incident. You have failed to meet the burden of establishing that you are a person of good moral character. Therefore, based on the above facts, youhave failed to establish eligibility for naturalization and your application must be, and hereby is, denied. YOU MAY FILE A NEW APPLICATION FOR NATURALIZATION 5 YEARS AFTER THE DATE OF YOUR ARREST, provided that all other eligibility requirement have been met.
that conclude what the denial letter says ..