Shandi was arrested for burglary, got 2 years probation and talked about it briefly on ANTM. So apparently an arrest record is not a dealbreaker.
This show isn't about "high fashion model material" and hasn't been since CG got involved. It's about the cult of Tyra, pushing whatever issues she decides to push that season (with contestants who fit the bill of course) and finding a model who fits whatever demographic Cover Girl wants to market to that year.
But it's fun to watch anyway.