You should be asking these questions of your attorney.
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With Form N-14 you are really not supposed to send in any new evidence, but wait for another appointment in the mail, and when you do get that appointment, you bring the requested evidence to the officer. As for the arrest, the certified disposition should have been sufficient, provided that the case was dismissed, and usually they would only ask for additional police records if the case was more serious and you had a conviction. In your case, it is really unclear as to why you were asked for additional police records.
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I agree, you should talk with your attorney.
In some immigration offices, all cases involving arrests must be reviewed by a supervisor. That may bet he case here. In regards to the certified police report, that should not be required and your attorney should make that argument on your behalf. Good luck!
This general advice does not create an attorney-client relationship.
The officer is fishing for evidence demonstrating that you weren't a person of good moral character during the statutory period. Certain criminal convictions will automatically bar someone from establishing good moral character. But USCIS is not limited to just convcitions. In my experience, however, it would be highly unusual for USCIS to base a finding of a lack of good moral character solely on a police report which didn't lead to an actual conviction.
BTW, what were you charged with?