Usually referred to as "Sally Rags", he was a subordinate of Clemenza sent to keep an eye on Carlo Rizzi's bookkeeping operation. He spent most of his time there with Rizzi and his friend, a man named Coach.
When Rizzi was beaten up in the street by Sonny Corleone, Ragusin immediately reported the incident to Clemenza.
Behind the scenes
In The Godfather Papers and Other Confessions, Mario Puzo describes a gambler named Salvatore "Sally Rags" Ragusin, whom this character's name is apparantly a reference to. In The Godfather novel however he is only referred to as Sally Rags.