Because they like Bitcoin for being easy-to-use from anywhere. They make their transactions faster and anonymously. But it is true that they will need to convert their crypto to fiat for a thing that can't be done with a crypto anyway. Besides, I assume that fiat is more commonly used by criminals compared to cryptocurrencies.
Last sentence contradicts the first one. Both fiat and cryptocurrencies are being used in illegal activities but more likely, fiat are are more link with the illegal activities due to its support across different governments. Also, what most of the crimininals are eyeing for is money and not investments, unless they are in this industry which makes them aware of things in order to generate bigger profit. Eitherway, fiat and cryptos will be used by criminals for their intentions, as long as there are violators of the law, and because it is simply a currency, which purpose is to be in the middle of every transaction.