If I understood your requirement correctly then I think issue is in following lines.
if (compare(im1, im2))
{
File.Move(originalPathFile + files[j].ToString() + ".png", duplicateOfFolder + files[j].ToString() + ".png");
writer.WriteLine(files[j].ToString() + ".png" + " is a duplicate of " + files[0].ToString() + ".png \n");
}
You are actually comparing first file with others but still copying the files in duplicate folder.
Replace following line
File.Move(originalPathFile + files[j].ToString() + ".png", duplicateOfFolder + files[j].ToString() + ".png");
with
String path = duplicateOfFolder;
if (!Directory.Exists(path))
{
Directory.CreateDirectory(path);
}
File.Move(originalPathFile + files[j].ToString() + ".png", path + "\\" + files[j].ToString() + ".png");
This should work.