The problem could be that his kennel crate has now been scented with his puppy urine and that is his trigger to potty in the crate. I would try sterilizing the crate or borrowing another one. Do not put the puppy pads in the crate. Puppy pads encourage him to potty. You don't want him to potty where he sleeps. So, clean the crate well or get another one. Fill the crate with a few puppy approved soft toys and some of your t-shirts with your scent on it and a few soft towels for him or her to sleep on. Then start by taking the puppy out of the crate every 30 minutes to the puppy pad or outside on the grass.(use a soft leash-they can run sometimes!) then when the puppy goes every 30 minutes, extend it to every 45 minutes. If the puppy is napping, DON'T wake it up to go potty but watch for him to wake up so you can take him to potty right away! You want his and your scent in his bed and the puppy pad or grass scent AWAY from his bed. He will make the connection soon. Give him a tasty small treat each time he does his business in the right area. You will have to spend ALL your time working on this. NEVER hit an animal for not understanding. Be patient but don't give up.