Is there a way to copy files into an encrypted folder?

You should just be able to drag and drop files into the share. They should inherit the encryption that is set on the folder.

Have you tried an xcopy or robocopy?

Keep in mind that also the owner of the file will be able to decrypt and see files.  So make sure that the person that encrypted the files, and folder is the same as the one that is connecting to that shared folder.  Otherwise you wont be able to see or get to the folder.  

Good luck.  

Response to xxdcmast:

When I try to drag and drop the file, it states the following:
"You need permission to perform this action" followed by my machine name. Interestingly, it is not having a problem with user credentials but from the machine that I am copying the file from.

I have verified that I have the necessary permissions because if I remove the option to encrypt the folder (by unmarking the checkbox that states "Encrypt contents that secure data"), I can copy the file just fine.

How do you do a xcopy? Could you please send me the command line for this?

Response to pr0t0c0l12:

Yes, I have verified that username that created the folder (and marked folder as encrypted) is the same as the username copying the file.

Hope this explanation helps you.  See the file attached.  It came from:

http://technet.microsoft.com/en-us/library/bb457065.aspx

Good luck.
efs--over-network.txt

Response to pr0t0c0l12:

Still no luck. I am unable to copy the file into the encrypted folder even if I encrypt the file (through Properties > Advanced Button > Marking the checkbox that states "Encrypt contents to Secure Data"). The encryption was completed on the same user credentials that created the folder.

It appears that the PC client that I am copying from does not have access to the folder rather than the user credentials itself.