If you mean built in Windows EFS encryption then I've recreated your problem (which is no help to either of us).
I turned on encryption for the downloads folder (and get the same issue as you). This command should remove it but it doesn't work..
Trying through the GUI I get "An error occurred applying attributes to the file. C:\Users\Hali\Downloads The specified file could not be decrypted"
C:\Users\Hali>cipher c:\users\hali\downloads /d
Decrypting files in C:\users\adam\
Downloads: The specified file could not be decrypted.
0 file(s) [or directorie(s)] within 1 directorie(s) were decrypted.
I'll try to fix it but may have to restore back. Oops.
You could try it anyway and see if it works for you.