I suspect he does this when you're not around because he knows he's not supposed to be doing it. He may also be doing it because he's on the wrong side of the fence, and it's just easier to do it where he's at than returning to 'his' area to relieve himself. You may want to put a pad in the forbidden area as well, since he seems to be able to get to it.

That being said, I don't like pee pads and wonder if he was trained to the outside before you got him. You didn't say. If he was, and you are using pads, you may as well say you are retraining him and he may be confused. Regardless........I hope you are taking him outside to run off his energy and letting him relieve himself there. Is that an option?

Taking toys away won't accomplish anything. Reinforcing the positive is the way to train him, whether he's attention driven or food driven. You say recently but how recent is that? He may be acting out a separation anxiety or massive change of habit and environment. Have you considered crate training?

This is not an impossible situation, but you may have to sort through a lot of variables to work out a useable routine and for sure you will have to invest some time and patience into the solution. The inside fence bothers me when you are not around. I have seen dogs literally hung up on them and dangling when the owners are absent.

You've got to start from square one and treat the dog as though it's a new puppy you've brought into your home. It doesn't matter that he was house trained in his previous home.
He's in a totally new environment, with a new owner, and he doesn't know what's expected.
Research crate training and take him out often to relieve himself......with lots of praise when he does. Also take him on as many walks as possible for exercise and stimulation.
Forget using the fence since he now knows how to get thru it. Either crate him or keep him in a smaller room (such as a bathroom) when you're gone. Personally, I'd crate him and leave the TV on whenever you have to leave the home. Make sure the crate is the correct size for him and go thru the process of getting him used to the crate before closing him in it. Do you know if the previous owner crate trained him?

Once he bonds with you and he becomes familiar with a routine for elimination, I think you'll both be very happy. : )

Did the previous owner have him trained to a pee pad? Is that what they meant by potty trained?

Is he neutered? That may help. BTW, a lot of this breed end up in rescue because they can't be housebroken. Your "friend" wasn't being honest with you. It's going to take patience and time, and you'll have to start from square one with him.