Robocopy - ERROR 124 (0x0000007C) Creating Destination Directory

Hoping someone familiar with Windows 10 and Robocopy can help.

I am using the following robocopy command in backup script that is being run as Administrator (yes the real Administrator user ID)

runas /user:Administrator backup.bat

robocopy N:\FNL E:\FNL /MIR /E /Z /R:1 /W:1 /V /NP /LOG+:backup.log

As long as there have been no new files for directories created in the source folder, in this case N:\FNL it seems to run fine. As soon as I create a directory, for example "Fred", I get the following error:

ERROR 124 (0x0000007C) Creating Destination Directory N:\FNL\Fred The system call level is not correct.

I have changed file permission for "Authenticated Users" to Full Control and as well have taken ownership of all folders and sub-folders/child objects on the target drive but still get the same error.

Anyone have an idea what I might be doing wrong?